Westmoreland commissioners say $140 million borrowing plan will put off future tax hike

Rich Cholodofsky, Tribune-Review, Greensburg, Pa.
·2 min read

Apr. 16—Westmoreland commissioners said a plan to borrow about $140 million this year to bolster the county's pension fund could prevent a future property tax increase.

Commissioners on Thursday signed off on the preliminary work to hire financial advisers, lawyers and underwriters who will finalize the plan that officials said will ensure the fund that pays benefits to more than 1,300 government retirees remains solvent over the next three decades.

"This will reduce the general fund burden," Commissioner Sean Kertes said. "We're saving general fund expenditures that we can use for other means."

In December, commissioners approved a $339.7 million budget for 2021 that included a $2.3 million deficit that was made up through the use of surplus funds. That spending plan included a projected $12 million payment to the pension fund. More recent estimates have increased the pension fund payment to as much as $17 million this year.

Finance director Meghan McCandless said the borrowed money will be dedicated solely to making annual payments to the pension fund and reducing the amount each year that the county will have to take from its general fund to meet retirement obligations.

"This is a safety net to prevent a tax increase. With the pandemic, the commissioners were trying to explore options to avoid a tax increase," McCandless said.

Property taxes were last increased for 2020 by a previous board of commissioners. That 2.4% tax hike was the first in 15 years. Commissioners made no changes to the property tax rate for 2021.

The pension fund, most recently valued at more than $500 million, is funded at nearly 82%. The borrowing plan will ensure the account is 100% funded, McCandless said.

This year's budget included an assumption that the pension fund borrowing plan would be approved and, as a result, estimated the county would end this year with a surplus of more than $8.3 million. Revised financial estimates suggest the 2021 savings could result in an additional $2 million that would grow the end-of-year surplus to more than $10 million.

McCandless said the borrowing could result in a more than $7 million saving to the county budget this year.

Rich Cholodofsky is a Tribune-Review staff writer. You can contact Rich at 724-830-6293, rcholodofsky@triblive.com or via Twitter .